Pension CETV: What Your Pension's Transfer Value Means on Divorce

Pension CETV: What Your Pension’s Transfer Value Means on Divorce

By Iblal IqbalPublished 24 September 2026Last reviewed 24 September 202612 mins read11 sections

Part of: Financial Settlement after Divorce

A pension CETV has arrived, and the number looks too small for decades of work. That feeling is worth listening to. A CETV (cash equivalent transfer value) is the lump sum a scheme puts on your pension. In England and Wales, it is the usual starting value when a divorce divides pensions. HM Treasury calls CETVs the basic measure of value for pensions in a divorce (HM Treasury guidance). Yet for some schemes, the figure can mislead. Our guide to financial settlement after divorce shows where pensions fit.

This guide covers England and Wales only. It is general information, not financial advice.

Reviewed by: Garry Steedman, Family Law Consultant (Divorce, Children & TOLATA), Kabir Family Law

What is a pension CETV? The CETV meaning in plain English

In plain English, the CETV meaning is simple. It is the cash sum your scheme puts on your pension rights if they left the scheme today. HM Treasury describes it as the amount you can take to another pension instead of keeping benefits in the scheme. The Pensions Regulator calls it the expected cost of providing your benefits (TPR guidance).

So what is a CETV in a divorce? It is the figure the law starts from. Regulations set the method. The court then picks a valuation date between a year before the divorce application and the day it decides.

However, a pension CETV does not tell you what the pension will pay or would cost to replace. Many people still treat it as the pension’s true worth and build a split around it. That is often where trouble starts, because the figure rests on the scheme’s assumptions, not on your future income.

How is a CETV worked out for your pension?

It depends on the kind of pension. For a savings pot, known as a money purchase pension, the value is mainly what went in plus investment returns. A defined benefit pension, such as a final salary scheme, promises an income instead. So the scheme values it on actuarial assumptions about the future.

Use the table below as a map, not a valuation tool.

So two CETVs of the same size can buy very different incomes. Adding the figures and halving them can be fair in simple cases. But PAG 2 lists factors that make that approach unfair in others (para 6.12).

How do you get a CETV for your pension, and how long does it take?

You ask the scheme that holds the pension. The law then sets a deadline of 3 months from the request. That drops to 6 weeks if proceedings have started and you say so when you ask. A court can also set a shorter deadline (SI 2000/1048, reg 2(5)).

Court cases tighten the timetable. Once told the first appointment date, the person with the pension has 7 days to ask each scheme. When the valuation arrives, they have 7 days to send the other side a copy. A valuation dated within 12 months of the first appointment can stand in for a new request (Family Procedure Rules 9.29 and 9.30).

Where a pension order is on the table, the court can also direct a Pension Inquiry Form, known as Form P. It gathers extra scheme details, including charges. State Pension figures come from the Department for Work and Pensions instead, through its BR20 valuation form.

Small slips here cost time. People forget to say the pension CETV is for divorce, leave out an old workplace scheme, or rely on a stale figure. Each slip can delay the case, or leave a pension out altogether.

How is a pension CETV used in divorce?

The court must take pensions into account on divorce, including benefits a spouse will lose the chance of getting (MCA 1973, s.25B). The CETV is the usual evidence of value, and it goes to court with your Form E financial statement. The pension then moves through five stages:

1. Someone asks for the valuation. The scheme values your benefits on the day it gets the request. If you are still building them up, it treats you as if you stopped that day (SI 2000/1048, reg 3).
2. You both see the figure. It forms part of the financial disclosure, so you work from the same numbers.
3. You agree a split, or the court decides one. Options include sharing the pension, offsetting it against other assets, or attaching future payments (PAG 2).
4. The order goes to the scheme. The scheme then has 4 months to carry it out, from when the order takes effect or when it has the papers it needs, if later (WRPA 1999, s.34).
5. The scheme picks a valuation day. It applies a percentage share to the CETV on that day, not to the figure you negotiated with (WRPA 1999, s.29).

Our pension sharing order page explains the order itself. Values can move between the letter and the transfer, so the sum that moves may differ. GOV.UK also warns that a financial order applied for after the final order may have consequences, particularly for pensions (GOV.UK).

Why can a CETV undervalue a final salary pension?

Because nobody designed it for the question a separating couple is asking. The then President of the Family Division commended PAG 2, the Pension Advisory Group’s 2024 guide, to judges as formal guidance. It warns of “inherent limitations in the use of Cash Equivalent figures”. For a significant defined benefit scheme, it says the CETV may be unreliable as a divorce value (PAG 2, para 1.19).

One test compares a pension CETV with the cost of buying the same income from an insurer. You may see this called the hypothetical annuity cost. In one PAG 2 example, a pension share turned a £30,000-a-year final salary pension into £24,000 a year between the couple. The guide puts that down to the CETV not matching the open-market cost of an equivalent pension (para 7.23).

Public service schemes add another layer. HM Treasury sets the discount rate behind their CETVs: now 2.0% above CPI inflation, replacing the 1.7% rate from April 2023. PAG 2 urges caution about treating public and private sector figures as equal (Appendix I). For a teacher’s pension, see our guide to teacher pension delays in divorce.

This is where people lose out. Offsetting means keeping a pension in exchange for other assets. PAG 2 notes it is the most common pension solution on divorce, yet it does not always rest on a proper valuation (para 1.20). Trade a final salary pension for more of the house on the pension CETV alone, and the gap may only show at retirement.

Is a final salary or public service pension part of your settlement? Pause before you agree the figures. Book a free initial consultation and one of our specialists will give you initial advice on whether the CETV alone is a safe basis.

When does a pension need a PODE report, not just a CETV?

A PODE is a pensions on divorce expert. Where the CETV may be the wrong valuation for divorce, PAG 2 says you will probably need a PODE report (para 6.12). Usually both of you instruct one expert together, as a single joint expert.

The report often compares the incomes each of you could have, using the cost of annuities (para 6.16). PODEs include pension actuaries and independent financial advisers. Yet PAG 2 notes there is currently no professional qualification for the role (Appendix C). Where an expert sets their own capital value, different experts may reasonably reach different figures (para 6.16). So the expert you choose, and what you ask, both matter.

What happens to a pension CETV when the scheme enters the PPF?

The Pension Protection Fund (PPF) pays compensation to members of eligible defined benefit schemes. It pays after a qualifying employer insolvency, when the scheme cannot cover PPF levels of compensation (GOV.UK). A divorce court can then share it through a pension compensation sharing order (MCA 1973, s.21B).

Here you need a PPF compensation valuation, not a normal scheme figure. The PPF compensation value is a cash equivalent on assumptions the PPF Board approves, dated the day the Board got the request (SI 2011/731, reg 4). The court can also direct a Pension Protection Fund Inquiry Form (FPR 9.15(7)).

Timing matters most here. During the PPF assessment period, a scheme still issues CETVs, but PAG 2 says they are likely to come out lower (Appendix K). A pension CETV from before that period may no longer fit, and an agreement built on it could rest on the wrong number.

Is your pension CETV ready to rely on? A quick checklist

Use this before you agree anything. It does not value a pension.

Frequently asked questions

Expert Tip

A common mistake is treating the CETV as the answer, when it is really the first question. A final salary pension and a pension pot with the same CETV can pay very different incomes. So before you trade a pension for other assets, find out what kind of scheme it is and roughly what income it may pay. Asking early costs far less than finding the gap at retirement.

Iblal Iqbal, Partner & Family Law Strategist